16 Oct 2024
Facing a challenge in figuring out the fees for your remittance transfer? When sending money from Belgium to India, the substantial remittance fees significantly reduce the intended value of the transfer. So, with approximately 24,732 members of the Indian Diaspora in Belgium, there is a pressing need to minimize these fees. When you send money to India from Belgium, the fees are influenced by various factors. Although they may appear to be an additional expense, they are crucial for money transfer companies to cover their costs.
But that doesn't necessarily mean that they’ve every right to charge you a higher amount! Therefore, to effectively reduce these charges and ensure that a significant amount of Rupee reaches your family in India, you need to understand the calculation of remittance fees. Keep reading to learn how to effectively calculate and minimize remittance fees and make your hard-earned money reach your loved ones without excessive deductions.
First, let’s start by understanding the total cost when it comes to sending money across borders.
The process of sending money across borders, especially from countries like Belgium to India, involves various costs. These costs might seem small, but when you add them up, they can significantly impact the value intended for your family back home. So, to ensure that your hard-earned money reaches your loved ones without excessive deductions, here’s a breakdown of these costs.
Remittance fees are made of multiple things. To learn how to calculate them, let’s get aware of its core components.
Sending money internationally incurs fees and taxes. This fee and tax is imposed by money transfer service providers for facilitating the transfer. These costs are typically transparent and should be factored into your overall remittance planning.
When you send money online to India from Belgium, service providers apply the exchange rate. This means conducting transactions involving two different currencies comes with a fee. At today's rate, one Euro equals 92.92 Indian Rupee.
This exchange rate plays a pivotal role in determining the final amount your family in India will receive. However, the difference between the exchange rate your remittance service provider is offering and what the market is stating is different. This difference is because there is a fee involved. This fee is known as the exchange rate "spread" or "margin."
Upon reaching the recipient in India, additional fees and taxes may be levied for receiving the transferred funds. To gain insights into the various options available, it is advisable to visit the websites of different service providers and analyze their pricing structures.
When making remittance transactions from Belgium to India, you can find out the total remittance costs using a straightforward formula. The formula for calculating the remittance fee is given by:
T = F + (P × Remittance Amount) + A.
Here, T represents the total remittance fee, F denotes the flat fee, P signifies the percentage fee, A represents additional fixed costs, and the Remittance Amount is the sum of money being sent. F, P, and A might vary for different service providers. Let’s see a real-life example calculation with this formula.
Suppose you’re initiating an online money transfer from Belgium to India with the following details:
Now, let’s substitute the given values into the formula to determine the total remittance fee:
Let’s convert the remittance fee into Indian Rupee and determine how much of the transfer will be deducted from your remittance:
Thus, for a 100 EUR remittance (9292 INR), the applicable fee amounts to 6 EUR (557.52 INR).
Now that you can calculate the remittance fee, minimizing them is the next step. But how can you minimize the cost? Here are some ground rules for effectively minimizing remittance fees.
Seeking out diverse offers from various service providers, like ACE Money Transfer, will help you make an informed decision. Here’s a step-by-step guide to navigate through the complexities of remittance transactions and select the most favorable service provider/payment method combination.
Start by exploring different offers from various service providers, both online and at physical branches. Then, follow these steps.
Read More: A Brief Overview of ACE Money Transfer's Payment Options for Expats.
If the provider cannot provide the exact amount your beneficiary will receive, gather comprehensive details. These details might include the sender's fees and taxes, the applied exchange rate, and any fees and taxes to be charged to the beneficiary.
And if the sending entity differs from the delivering entity, obtain information on the charges the beneficiary will have to give for receiving the money.
Once you get the necessary information, utilise a remittance calculator to determine the exact amount the beneficiary will receive by taking into account all applicable costs. Then, verify if the amount provided by the service provider aligns with the calculated amount to ensure transparency and accuracy in the remittance process.
Input the market exchange rate into the calculator to gain insights into the single cost components and the total cost of the transaction, expressed in the two currencies involved. After that, evaluate the total cost as a fraction of the amount paid.
Once you’ve proceeded for the payment, you have to stay vigilant! Here’s how you can ensure you are on the right track when sending money to India.
If you fail to gather comprehensive information on remittance costs, proceed with the payment. After the transaction, check the cost. Once your family receives the funds, collect the necessary information to compute the actual total cost.
Constantly comparing the different offers you might get when making an online money transfer from Belgium to India can sometimes be tiring. However, you don’t want to have fewer comparisons or limited recommendations from acquaintances. This could be an injustice to the hard work you do by living away from your family.
Last but not least, here’s what you also need to consider when sending money across borders.
Check online reviews of money transfer platforms, particularly when you are dealing with lesser-known providers. This will help you verify if the provider possesses an official license and is supervised by a public authority — which is required for all providers operating in Belgium.
Assess the potential benefits of maintaining the majority of your funds in one of the two countries. When doing so, consider currency appreciation, interest rates, and the convenience of sending larger amounts infrequently compared to smaller amounts regularly.
Making sure that your hard-earned money reaches its true owner is your right. But it requires you to understand the fees associated with remittance and the total cost. Although obtaining information about remittance fees is straightforward, calculating the associated costs can be more complex. You can utilize online resources, such as ACE Money Transfer, to calculate spot fees and apply fundamental mathematical principles necessary for exchange rate computations.
ACE provides a transfer calculator that facilitates understanding and computing remittance fees. Through its website and mobile app, ACE offers a thoughtfully designed platform that is easy to use. ACE also imposes minimal transfer fees and provides advanced exchange rate tools, attractive offers, and support for multiple languages. With swift and secure service, ACE strives to enhance your overall experience for an online money transfer from Belgium to India.
Factors contributing to the total remittance cost include the transfer fees, exchange rate discrepancies, and receiving fees and taxes. These costs have a cumulative effect and can significantly impact the final amount received by the beneficiary in India.
The formula for calculating the remittance fee is given by T = F + (P × Remittance Amount) + A, where T represents the total remittance fee, F denotes the flat fee, P signifies the percentage fee, A represents additional fixed costs, and Remittance Amount is the sum of money being sent.
Prioritising a comprehensive comparison of offers from various service providers, using a remittance calculator to ensure transparency, er and overall accuracy in the remittance process, and leveraging market exchange rate analysis are essential steps to minimise remittance fees effectively.
To ensure you are on the right track when sending money to India, stay vigilant after the transaction. Conducting a post-transaction evaluation and regularly tracking and comparing costs helps you ensure that the total cost aligns with the calculated amount and offers complete transparency.
ACE Money Transfer offers a transfer calculator that facilitates understanding the computation of remittance fees, which enables customers to accurately calculate spot fees and apply fundamental mathematical principles necessary for exchange rate computations. Additionally, ACE imposes minimal transfer fees and provides advanced exchange rate tools, attractive offers, and support for multiple languages, ensuring swift and secure money transfer services.
References:
